Nov. 2 (Bloomberg) -- Most Japanese stocks fell, dragging
the Topix index to its seventh consecutive decline, as the yen
traded near a 15-year high before this week’s meetings of the
U.S. Federal Reserve and Bank of Japan.

The Topix index fell less than 0.1 percent to 803.12 in
Tokyo, its lowest close since April 2009. Almost twice as many
stocks declined as advanced. The Nikkei 225 Stock Average gained
0.1 percent to 9,159.98 after retreating as much as 0.3 percent.

“People don’t know whether the yen’s trend will change or
not, so they cannot price in strong earnings,” said Yoshinori
Nagano, a senior strategist in Tokyo at Daiwa Asset Management
Co., which oversees about $104 billion. “There is no clear
consensus on how the Fed will set monetary policies.”

The Bank of Japan said last week that policy makers
advanced their next session to Nov. 4-5, following a meeting by
the U.S. Federal Reserve on Nov. 2-3. Japanese markets are
closed tomorrow for a public holiday.

‘Selective Buying’

“Investors will refrain from active trading and there’ll
be selective buying,” said Fumiyuki Nakanishi, a strategist at
Tokyo-based SMBC Friend Securities Co.

The Nikkei 225 has decreased 13 percent this year, the most
among the world’s 40 largest equity markets. Shares in the gauge
trade at 16.2 times estimated earnings on average, the lowest
level in a month.

Honda Motor sank 2.3 percent to 2,725 yen, the heaviest
drag on the Topix and the Nikkei. Mazda Motor Corp., Japan’s
second-largest car exporter, dropped 1 percent to 202 yen.
Advantest lost 1.3 percent to 1,474 yen, the lowest close since
April 2009. Sony Corp., an electronics maker that derives about
70 percent of its revenue abroad, fell 0.9 percent to 2,627 yen.

The yen traded at 80.60 against the dollar at 3 p.m. in
Tokyo and appreciated to 80.22 yesterday, the highest level
since 1995. The yen is on course for its strongest annual
average level since currencies began trading freely in 1971,
according to data compiled by Bloomberg and based on each day’s
closing price. A stronger yen reduces the value of companies’
overseas revenue when converted to their home currency.

Fujikura Plunges

More than five companies have exceeded profit estimates for
every four that have fallen short, based on Bloomberg data
compiled from about 630 companies that have reported quarterly
results since Oct. 7. About 360 companies out of more than 1,650
in the Topix are scheduled to announce earnings this week,
according to data compiled by Bloomberg.

Fujikura plummeted 11 percent to 330 yen, the biggest drop
in the Nikkei 225. The cable maker said operating profit in the
April-September period fell 16 percent to 7.72 billion yen
($95.8 million), lower than the company’s target of 8 billion
yen. Fujikura had its rating reduced to “neutral” from “buy”
at UBS AG.

Sumitomo Chemical tumbled 4.1 percent to 332 yen, the
lowest since Nov. 27. The company said its first-half net income
fell short of its forecast and reduced its full-year outlook by
78 percent to 10 billion yen, citing the yen’s appreciation and
goodwill depreciation.

Elpida’s Profit Drops

Elpida Memory Inc., the world’s third-biggest maker of
computer-memory chips, slumped 5.1 percent to 764 yen, a level
not seen since April 2009. The company said in a preliminary
earnings statement it had second-quarter net income of 8.8
billion yen. That was less than its first-quarter profit of 30.7
billion yen. Mitsubishi UFJ Morgan Stanley Securities Co. and
Goldman Sachs Group Inc. lowered their share-price estimates on
the company.

“The shortfall in second-quarter earnings raises the
possibility of earnings missing the consensus estimate,” for
the full year, Takeo Miyamoto, an analyst at Deutsche Bank AG,
wrote in a report dated yesterday. “Investors need to watch
developments” of dynamic-random-access-memory prices, according
to Miyamoto, who rates Elpida “sell.”

The Nikkei fluctuated between a gain of 0.2 percent and a
drop of 0.3 percent today. The gauge moved within a range of
48.41 points, the narrowest since March 10.

Stocks Fluctuate

“We’ve had strong earnings reports but many are not yet
priced in, especially small-to-midsize companies that are not
covered by analysts,” SMBC’s Nakanishi said.

Mitsubishi Chemical climbed 4.1 percent to 428 yen, the
second-biggest gain in the Nikkei 225. The company boosted its
full-year net income forecast 83 percent to 75 billion yen,
citing an increase in revenue from its pharmaceutical business.
It also boosted the planned year-end dividend to 5 yen from 4
yen a share.

Yokohama Rubber rallied 2.5 percent to 403 yen, the most in
almost two months. The company boosted its full-year net income
forecast 44 percent to 11.5 billion yen, citing cost cuts.

Brokerages advanced the most among the Topix’s 33 industry
groups today, rebounding from a 9.2 percent decline from Oct. 26
to Nov. 1, as earnings slumped at Nomura Holdings Inc. and Daiwa
Securities Group Inc. and on concern about declines in
securities transaction fees amid shrinking trading volume.
Nomura jumped 4.3 percent to 414 yen while Daiwa climbed 1.6
percent to 327 yen. Nomura was the most actively traded stock by
value today.